Britain's manufacturers enjoyed a stronger than expected rebound in business last month, fuelling hopes that the sector will boost overall economic growth this quarter.

Manufacturing activity grew at its fastest for more than a year as new orders and output both picked up pace, according to the closely watched Markit/CIPS UK manufacturing PMI survey. Sister surveys in the eurozone showed the manufacturing picture there brightened markedly too, although the sector remained in decline.

The UK report's headline activity index rose to 51.3 in May from an upwardly revised 50.2 in April. That was well ahead of the 50 mark that separates growth from contraction and easily beat forecasts for 50.2 in a Reuters poll of economists. It was the highest reading since March 2012.

"Output is also likely to be raised further in the coming months, as firms refill warehouses after stronger than expected demand has led to a sharp depletion in finished-goods stocks. The tentative return to job creation in the sector in May also suggests that manufacturers are becoming more confident in the outlook," he added.

Economists said the report suggested manufacturing's recession was drawing to a close in the UK. "Today's survey is a tentatively encouraging sign that the manufacturing sector may start to play a part in the overall economic recovery," said Samuel Tombs at Capital Economics.

The survey signalled that the growth in manufacturing, which accounts for around a tenth of the UK economy, was broad-based with a pick-up for consumer, intermediate and investment goods sectors. Factories linked higher output to "improved new order inflows, successful new product launches and efforts to clear backlogs of work", the report added.

Domestic demand was the main driver behind the third consecutive monthly rise for new orders. For exporters, there was higher demand from Germany, France, east Asia and North America, where many UK companies have been seeking out new business as their traditional European trading partners continue to struggle.

The PMI reports from the eurozone underlined continuing economic challenges there, with the headline reading for the eurozone at 48.3 in May, the 22nd month below 50. Still, that was up from 46.7 in April and the highest since February 2012.

Economists highlighted signs of some stabilisation in the sector but said overall the currency bloc's downturn would drag on.

"Although the euro area manufacturing economy continued to contract in May, it is reassuring to see the rate of decline ease to such a marked extent," said Chris Williamson, chief economist at Markit.

"The surveys still suggest that GDP is likely to have fallen 0.2% in the second quarter, extending the region's recession into a seventh successive quarter."